A Businessman-Scientist Shakes - Up the Health Institutes

BETHESDA, Md.- Relations between Dr. Elias Zerhouni, the director of the National
Institutes of Health, and many agency scientists have grown so contentious that even
Dr. Zerhouni’s wardrobe is a sore point.

While Dr. Zerhouni’s predecessor, Dr. Harold Varmus, wore khakis and rumpled shirts
and biked to work, Dr. Zerhouni is given to tailored blue suits and crisp red ties,
and he drives a silver Mercedes sports car, parking it near the administration building
in a row of battered Subarus and Toyotas.

He is an Algerian immigrant who came to this country 30 years ago with $369 in his
pocket but became a multimillionaire after inventing numerous devices as a radiologist
at Johns Hopkins.

"Dr. Zerhouni cuts a different figure than the rest of us," said Dr. Ezekiel J. Emanuel,
leader of a group of dissident scientists.

Since Dr. Zerhouni was appointed by President Bush in 2002, the agency has been rocked
by controversies as diverse as stem cells and publication policies and revelations
that some agency scientists were getting hundreds of thousands of dollars from undisclosed
work for drug companies.

On Thursday, in one of his most unpopular moves, he officially banned agency scientists
from consulting for drug companies, though he softened a proposed rule that would
have required 6,000 of them to sell all shares in drug and biotechnology companies.
Instead, only the top 200 officials must keep their holdings in any one drug firm
below a $15,000 cap.

In an interview, Dr. Zerhouni acknowledged that his agency was going through a difficult
period and that staff morale had suffered. While few at the agency blame Dr. Zerhouni
for causing the agency’s problems, many say he has failed to solve them properly in
part because he is an administrator, not a real scientist.

Dr. Emanuel complained that getting permission now to travel or to hire anyone is
nearly impossible because of red tape.

He said that Dr. Zerhouni had not been as inclusive as Dr. Varmus had been, and that
Dr. Zerhouni reacted more negatively to those who disagreed with him.

Dr. Zerhouni acknowledged in a recent memo that the agency’s travel and human resources
policies needed improving. But he said that over all his policies were helping to
not only protect the integrity of the health institutes but to bring an agencywide
focus to the large problems.

Indeed, he gets high marks from many outside the agency for his efforts to tame its
tangled structure and coordinate efforts to create chemical libraries and explore
protein structures.

As for his suits, Dr. Zerhouni acknowledged that they might make him stand out at
the health institutes. But as an Algerian immigrant who was educated abroad and is
one of the Bush administration’s few Muslims, he has always been "the odd man out."

"I’m not going to pretend," he said.

Underlying all the sniping is a severe identity crisis that is partly the legacy of
Dr. Varmus, who encouraged the notion that the health institutes were not so much
a government agency as a kind of benevolent, well-financed university. Agency researchers
- who refer to the agency’s headquarters as a "campus" and its Civil Service protections
as "tenure" - loved him for it.

Dr. Varmus delighted in attending scientific seminars and opened the campus to community
events. Budgets soared and Congress mostly stayed out of scientific decisions. He
also encouraged a once-rare form of premium pay to increase salaries, and he loosened
conflict-of-interest rules, allowing some scientists to earn hundreds of thousands
of dollars on the side.

But this warm academic patina is disappearing. In the wake of the 2001 terrorist attacks,
security guards now swarm the agency’s headquarters, making it feel more like a military
base than a college campus. After doubling from 1999 to 2003, the health institutes’
budget has been mostly flat.

And Dr. Varmus’s changes in salary and conflict-of-interest rules may have helped
create the problems associated with a Congressional inquiry in which agency researchers
were found to be consulting for drug companies without agency permission.

Dr. Zerhouni initially dismissed the revelations about consulting improprieties -
first disclosed in an investigation by The Los Angeles Times - as paperwork errors
or the indiscretions of a few. Then he agreed to some policy changes but insisted
that consulting should still be allowed, saying a total ban would turn the health
institutes into "a convent" that was not in keeping with the insistence of Congress
that their research lead to cures.

"The public is asking us to make love and be a virgin at the same time," he said last
year. "It’s schizophrenic."

But as Congressional disapproval grew, Dr. Zerhouni changed his tune and decided to
not only to support a ban but defend it strongly.

"We look like we’re just crybabies," said Dr. Zerhouni, who confessed to some impatience
with his critics. "And the world out there is not sympathetic to government scientists
who make more money than the vice president of the United States. Let’s get real."

Dr. Zerhouni is an unlikely champion of rules limiting contacts between scientists
and companies. As a radiologist at Johns Hopkins, his inventions and efforts led to
the founding of several companies. From very modest beginnings, he has amassed assets
of $10 million to $30 million, according to his most recent financial disclosure statement.
His accountant is one of his best friends.

"Zerhouni would be a businessman’s version of a scientist, and Varmus was a scientist’s
version of a scientist," said Dr. Thomas Insel, director of the National Institute
of Mental Health, who said that Dr. Zerhouni’s superior management skills were needed
now.

Dr. Zerhouni said that nothing about the health institutes’ new rules would prevent
the kind of collaborations that he once had with companies. "If you have a patent
and you want to commercialize it, absolutely you can do it," he said.

He likened the consulting ban to Johnson & Johnson’s acclaimed decision in 1982 to
withdraw all bottles of Tylenol when a few were found to have been poisoned. After
the ban has been in effect for at least a year and the agency has been able to construct
an ethics system that inspires confidence, he may once again allow consulting, he
said.

"At the end of the day, you have to make a choice between being unpopular for one
topic and doing the right thing by your agency," he said. "You do the right thing
by your agency, and that’s what I think I’m doing and I won’t stop."

Friends and former colleagues say that Dr. Zerhouni has always had a keen ethical
sense. Dr. William R. Brody, president of Johns Hopkins, said he first met Dr. Zerhouni
when the university sent Dr. Zerhouni to test a medical imaging machine invented in
part by Dr. Brody. At the time, Dr. Brody was not associated with Johns Hopkins.

Dr. Zerhouni’s detailed knowledge of the machine’s engineering so impressed Dr. Brody
that he tried to hire Dr. Zerhouni as a consultant. Dr. Zerhouni refused for fear
that such a relationship could taint his university work.

Radiologists are often acutely aware of conflict-of-interest issues, Dr. Brody said.
Imaging machines are expensive; hospitals and universities often ask their own radiologists
to help decide which to buy; and consulting arrangements with imaging companies would
make providing independent advice impossible, Dr. Brody said.

Critics say that they wish that Dr. Zerhouni would bring some of the passion he has
shown in the fight about consulting to the debate over stem cells. At Johns Hopkins,
Dr. Zerhouni helped set up a stem cell institute. When President Bush announced that
he would support financing for stem cell research but only with severe restrictions,
many had hoped that Dr. Zerhouni would denounce the restrictions.

He said that if evidence showed the administration’s restrictions were hindering research,
he would be "first in line" to inform the president.

In April, he told a Senate panel just that and even suggested that he had no moral
qualms about it. When asked why stem cell research raised moral issues, Dr. Zerhouni
responded, "I think you’ll have to ask that from those who hold that view."

In an interview, Dr. Zerhouni said he had never compromised on the truth. "I have
complete consistency, despite what anyone thinks," he said.

It has been a classic balancing act for Dr. Zerhouni, friends say. He is always true
to the facts, but he is also fiercely loyal, they say. Indeed, Dr. Zerhouni used the
word "loyal" or "loyalty" five times in a 90-minute interview, mostly to chide critics
for disparaging the health institutes.

"I think you have to have a deep loyalty to your institution," he said.

Dr. Brody said he believed that Dr. Zerhouni’s immigrant roots and rags-to-riches
personal story was the explanation.

"He’s very deferential to authority and to positions of honor," Dr. Brody said.

Dr. Zerhouni defended his suits as necessary for his many meetings on Capitol Hill.
Dr. Varmus had those same meetings, of course, but Dr. Varmus left a suit in his office,
made frequent wardrobe changes and often scrambled to find dark socks.

Dr. Varmus’s only criticism of Dr. Zerhouni was that he needed to mingle more. Agency
scientists "would like him if they knew him better," Dr. Varmus said.

Dr. Zerhouni said that although he was "not the conventional type," he dressed appropriately
for his job. If he were still a researcher, he would dress differently, he said.

"I’m feeling comfortable this way in the role that I play and the moment I play it,"
he said. "I’m not going to create this sort of pseudo-image that is not me.